SHARES in abrdn plunged by more than four per cent this morning after the Edinburgh-based asset management giant fell short of profit expectations and reported a rise in outflows from its investment funds in the first half of the year.
The company cited the “challenging global economic environment and market turbulence” as it recorded total net outflows of £35.9 billion in the first half, compared with £5.6bn in the first half of 2021.
And the investment giant, which changed its name from Standard Life Aberdeen in 2021, warned that the current market uncertainty means that its “ambitions for revenue growth and improved cost/income ratio are likely to take longer than originally expected”.
Assets under management narrowed to £508 billion from £542bn, which abrdn said reflected lower markets and the final Lloyds Banking Group tranche withdrawal of £24.4bn. The latter followed the end of abrdn’s contract to manage £109bn of Scottish Widows pension assets for Lloyds.
The outflows were partially offset by the inclusion of assets following abrdn’s acquisition of Manchester-based Interactive Investor, a subscription-based investing platform, for £1.5bn in December.
Chief executive Stephen Bird said: “The half-year group results largely reflect the challenging global economic environment and market turbulence. When I became CEO in late 2020 I said that we would pursue a strategy of diversification by refocusing our investments business into areas of strength, where we have scale and that lean into global growth trends and also significantly expand our reach into the higher growth UK wealth market.
“We are doing exactly that and the addition of interactive investor transforms our UK retail presence and future revenue streams. The strength of our balance sheet means that we can continue to invest and reward shareholders.”
abrdn reported that fee-based revenue had dipped by 8% in the first half to £696m, while adjusted operating profit was 28% lower at £115m, “driven by market movements”. Analysts had pencilled in operating profits of £130m.
The company booked net outflows of £3.8bn, compared with £1.9bn in the first half of 2021.
Shares were trading at 165.85p, down 7.1p, just after midday.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here